Never create a dependency on something that might not be able to deliver.

Sir, this would be my response to Poland’s prime minister Mateusz Morawiecki’s “Setting an EU budget is about more than arithmetic” February 20.

Prime minister I would agree with most here stated but, if I were a prime minister of Poland, the first question I would make before any budget discussion would be:

Eurozone, how do you intend to disarm that bomb of all Eurozone sovereign’s debts, for purposes of bank capital requirements, having been assigned a zero percent risk weight, even though none of these can print euros on their own will? 

If that bomb is not disarmed, EU might sadly end up as a failed intellectual fantasy, something which could have horrible consequences.

Or Prime Minister, let me put it like this: 

A budget does wittingly or unwittingly always create some kind of dependency, and the last thing a government should do, for the nation or for its citizens, is to create a dependency on something that might not be able to deliver. 

PS. Just think about all that dependency on pensions and social security people have, and that will not be delivered.

PS. I am a Polish citizen who does not speak Polish because of a gender issue. My mother tongue, which I speak fluently, is Swedish.

@PerKurowski

In 1988 one year before the Berlin Wall fell another wall was constructed, one which separated sovereign and private bank borrowings.

Sir, I refer to Ben Hall’s “State ownership back in vogue 30 years after fall of Berlin Wall” August 15.

The only real competitive advantage those in favor of SOEs can argue, is that governments usually have cheaper access to credit, so why put it in the hands of private investors who need to expect higher returns. 

But in 1988 by means of the Basel Accord 1988 the risk weighted bank capital requirements were adopted. With these banks were allowed to hold sovereign debt against much less, sometimes even zero capital, than what these had to hold against loans to the private sector. As a result the interest rate differences between private and public debt started to grow and with it, the SOE’s competitive advantage, and so we should not be too surprised about these being “back in vogue”. 

To illustrate my point just let me ask: Sir, where would the interest rates now be for the 0% risk weighted sovereign Italy, this even though it takes on debt not denominated in a domestic printable currency be, if Italian banks needed to hold as much capital against these as what they must hold against loans to Italian entrepreneurs?

PS. Here my letter to the Financial Stability Board

PS. Here my recent letter to the IMF

@PerKurowski

In year 2018 important issues could be dividing Poles, but Auschwitz and Poland’s treatment of Jews during World War II, around 75 years ago, should not be one of these.

Sir, I am the son of a Polish citizen who was one of the 728 prisoners that in June 1940 arrived on the first train to Auschwitz (#245 on his arm). Though I proudly carry a Polish passport, I have shamefully little knowledge of Poland. That said I am absolutely sure that if my father had heard someone defining “Auschwitz-Birkenau as a “Polish death camps”, he would have punched him. And had he heard of some few Poles not having been complicit in the pursuit of Jews, he would also have asked: “What are you smoking?”

Therefore I was very appreciative off Professor Jan Gross’ comment “Poland’s death camp law distorts history” February 6, and so I wrote to him.

But now Arkady Rzegocki’s “Poland in no way agreed to collaboration” on February 12, confuses me.

Many things could be dividing Poles in 2018, but Auschwitz and Poland’s treatment of Jews during World War II, about 75 years ago, should most definitely be one of those.

Please, for the sanity of Poland (and mine) have them both sit down and urgently resolve their differences… perhaps at an FT Lunch J

@PerKurowski

Anyone jumping ship on the delusion that risk-weighted capital requirements make banks safer and economies better, has a better chance to survive

Sir, Wolfgang Münchau discusses many delusions held by both Brexiters and Remainers, and argues correctly: “To make the best of Brexit, the UK will need to embrace a more entrepreneurial and innovative economy” “An old-fashioned economy heads towards a downfall” November 20.

But when he writes: “For Brexit to succeed the UK will end up becoming more — dare I say it — European”, I disagree.

That because when Münchau holds that Britain “has an entrepreneurial culture to build on”, that is unfortunately no longer the case. No country with an active “entrepreneurial culture” would ever have allowed the de facto anti entrepreneurial risk-weighted capital requirements for banks.

Sir, if I had to choose between a Britain that did not hold back its risk takers, and one that was comfortably living off a larger European market then, if thinking about my grandchildren, I would without any doubt prefer the first one.

As I see it the European Union, governed by unelected risk adverse technocrats, who like old soviet central planners paint from their desks roads to the future, is doomed to fail… and that no matter how much “Universities… work more closely with industry”. In that Europe, the faster you jump ships the better.

If I were a British citizen I would instead be calling out to Europe proposing a different EU. Who knows what answer I would get from Poland, Italy, Spain, Portugal and others? Why for instance should they stay with those who most benefit from a Euro made weaker by the weaker?

PS. For those who do not know me in the context of any European Union and Euro debate, perhaps the following Op-Ed could help as an introduction. 

https://perkurowski.blogspot.com/1998/11/burning-bridges-in-europe.html

@PerKurowski

For Britain’s and EU’s sake, Brexit negotiations should not be left exclusively in hands of Leavers and Brusselites.

Sir, most of the opinions on Brexit I have read in FT over the last year, seem to me have more to do with Remainers wanting it to turn out so bad so they can gorge on the “we told you so”, than with making the best out of something difficult.

In the same vein, on EU’s side, it seems to me that the Brusselites want to negotiate more in order to satisfy their by Brexit vote hurt egos, than with making the best out of something difficult.

Janan Ganesh writes in “The real saboteurs of Brexit are its own amateur leaders” November 14. So, if Leavers do not have what’s needed to negotiate Brexit well, as, that does not exculpate the Remainers from helping out in any which way they can… (or move out of Britain)

Gideon Rachman writes in namely: “Imposing a humiliating settlement on Britain might even seem economically advantageous. But the long term political and strategic consequences of a bitter Brexit are much harder to calculate.” “Britain is at the mercy of Brussels” November 14. And so, in a similar vein, the Brusselites need to be continuously reminded of that they could also be hold accountable for a bad Brexit.

If I were a British national and a Remainer, the first thing I would do is to launch a campaign messaging the following:

“Europeans since Britain will remain close to you… and since you could be next, it behooves you to keep an eye on your Brusselites so that Brexit goes well for all of us. The last thing we need in Europe at this moment is a neo-Versailles treaty.”

PS. As a Polish citizen, I would argue: “Brusselites, remember that many of us in EU have more in common with Britain than with some of our other Europeans”

@PerKurowski

Would you really want to survive in a world if that requires you acts that are inhuman beyond description?

Sir, I refer to Philippe Sands review of Göran Rosenberg’s “A brief stop”, November 9.

I am not a Jew, but my father, as a polish soldier was on the first train of prisoners to Auschwitz, where he spent years having to photograph many horrors. And my father, after the war, was also able to arrive to Sweden, about or even the same day as Rosenberg’s father… and where he met my mother. And I recently read this book in Swedish, and was equally moved by it.

But for me, the most nerve-wracking part of the book is the description of how in the Polish ghettos a Jewish Council had to wrestle with the decision to elaborate or not, a list with names of thousand of children and grandparents to be delivered to the Nazis, to certain death, in order for some to have a chance to survive. In the Lodz ghetto they did that, and Rosenberg and many other survived. “Would you really want to survive in a world that can require you do that?” is a haunting question that will stay with you.

You have to root out the monsters in their homeland first

Sir Stefan Wagstyl should perhaps have expanded the title “Stalin still looms large over eastern Europe” with the “because he still looms large over Russia” August 31. Wagstyl rightly points us to see that the way countries victimized by foreign monsters can overcome such events starts with how the monsters´ homelands overcome being just that. Since Germany has done so much more in accepting the horrendous realities of a Hitler, than Russia those of Stalin, Germany has been more able to overcome its own demons and shames, and, consequentially the world has been much more able not to hold it against it. Besides, these monster´s, if not pulled out completely, with all their roots, can rot and infect and propagate.